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CLC HUMAN RESOURCES
CORPORATE
LEADERSHIP
COUNCIL
CORPORATE EXECUTIVE BOARD
High-Impact Succession
Management
An Overview of CLC Human Resources’
Best Practices Research
Webinar
A FRAMEWORK FOR MEMBER CONVERSATIONS
The mission of the Corporate Executive Board is to create revolutionary economic advantage for leaders of the world’s great enterprises by enabling them to act with unparalleled
intelligence and confidence. We lift their performance at key decision points and career moments by delivering insight drawn from the most powerful global executive and professional
network. When we bring leaders together, it is crucial that our discussions neither restrict competition nor improperly share inside information. All other conversations are welcomed and
encouraged. We look forward to the continued and robust sharing of insights by member executives and professionals at Corporate Executive Board events.
COPIES AND COPYRIGHT
As always, members are welcome to an unlimited number of copies of the materials contained within this handout. Furthermore, members may copy any graphic herein for their own
internal purpose. The Corporate Executive Board Company requests only that members retain the copyright mark on all pages produced. Please contact your Member Support Center
at +1-866-913-6447 for any help we may provide.
The pages herein are the property of The Corporate Executive Board Company. Beyond the membership, no copyrighted materials of The Corporate Executive Board Company may
be reproduced without prior approval.
LEGAL CAVEAT
CLC Human Resources has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and CLC
Human Resources cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, CLC Human Resources is not engaged in rendering legal, accounting, or other
professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult
an appropriate professional. Neither The Corporate Executive Board Company nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in
their reports, whether caused by CLC Human Resources or its sources, or b) reliance upon any recommendation made by CLC Human Resources.
3
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
UNPACKING SUCCESSION RISK
The Four Succession Risks
Portfolio Risk
Risk of poor
deployment of
talent against
business goals.
Supporting Organization-
Wide Objectives
4
Readiness Risk
Risk of
underdeveloped
successors.
Transition Risk
Risk of poor
assimilation
of executive
talent into the
organization.
Enabling High Performance
of Successors
32
Vacancy Risk
Risk of critical
leadership
positions being
vacant.
Fixing the Succession
Planning Process
1
4
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
Risks Vacancy Risk Readiness Risk Transition Risk Portfolio Risk
Risk Management
Imperatives
Safeguard Critical
Business Capabilities
Accelerate Full
Business Exposure
Overcome New
Hire Derailment
Maximize Strategic
Talent Leverage
FROM RISK TO OPPORTUNITY
Four Risks: Four Imperatives
5
From CLC HUMAN RESOURCES
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© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
HIGH-IMPACT SUCCESSION MANAGEMENT
From Succession Planning to Strategic Executive Talent Management
VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK
I
Safeguarding Critical
Business Capabilities
2
Accelerating
Full Business Exposure
3
Overcoming
New Hire Derailment
4
Maximizing Strategic Talent
Leverage
Translating Business Strategy
into Talent Strategy
Executive Talent
Growth Review
Providing Needed
Development Experiences
Experience-Based
Succession Management
Defining Needed
Behavior Changes
Executive Transition
Management
Organizing for High-Impact
Talent Utilization
Strategic Human
Capital Review
Planning for
Key Departures
Needs-Based
Succession Planning
Balancing Short-Term
Business Risk with Long-Term
Development Benefit
Non-Obvious
Development Moves
Onboarding for
Organizational Fit
New Executive
Career Launch
6
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
OVERLY DEMOCRATIC PROCESS, WASTED EFFORTS
Overall Comparison of Vacancy Risk
VP of R&D and CFO
Source:	Corporate Leadership Council 2003 Succession Management Survey.
People and Positions Covered by Succession
Management Process1
Position A:
VP of R&D
Position B:
CFO
Urgency on
Time-to-Fill
High High
Overall Impact on
Business
High High
Scarcity of Skill Set
in the Labor Market
High Low
Short-Term Cost
of Vacancy
High Medium
Long-Term Cost
of Vacancy
High High
Vacancy Risk High Medium
93%
56%
41%
24%
13%
AllPositionsAbove
aCertainLevel
AllHigh-Potential
Employees
AllPositionswithSignificant
ImpactonBusiness
AllPositionsThat
RequireSpecializedSkills,
Abilities,orExpertise
AllPeopleorPositions
DifficulttoFindin
ExternalLaborMarket
n = 234.
1	 Respondents could select multiple responses.
7
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
CORPORATE
LEADERSHIP
COUNCIL
CORPORATE EXECUTIVE BOARD
EXECUTIVE TALENT GROWTH REVIEW
OVERVIEW
Johnson & Johnson protects business-critical capabilities through developing a talent review methodology designed
to rigorously assess and plan for senior executive growth.
8
From CLC HUMAN RESOURCES
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© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
MIND THE TALENT GAP
Embed Talent
Growth
Imperative
Conduct Talent
Review “Roll-
Up” Strategy
Develop an
Aggregate
View of Growth
Assets
Strengthen
Quality of Talent
Review Dialogue
Commit to
Rigorous
Examination of
Talent Options
Drive to $80 Billion in Revenue
54321
Number of Senior Executives1
Revenue
1,000
500
0
Year 1 Year 3 Year 5
$100B
$60B
$20B
1	 Actual numbers disguised.
9
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
FOUR LENSES ON EXECUTIVE CAPABILITY
Johnson & Johnson’s “Folio Map”
5
4
4
4
4
3
3
3
2
Keepers—Soundly performing
executives, whose potential
matches their level of accountability.
Movers: Blockers—Executives
can identify managers with low
results or potential “blocking” the
development of rising leaders.
Low
High
High
Low
Performance Results
THE FOUR LENSES
1. Potential
Assessment
2. Performance
Results
3. Position’s Level of
Accountability
4. People Development
Codes
5–Outstanding
4–Superior
3–Competent
2–Needs Improvement
1–Unacceptable
Size of
Circle
PotentialAssessment
Source:	Fulmer, Robert, “Johnson  Johnson: Frameworks for Leadership,” Organizational Dynamics, Vol. 29, no. 3, 2001.
Growers—Enables identification
of high-potential, high-results
executives in need of development
assignments.
Movers: Underperformers—
Employees needing reassignment
based on suboptimal performance
or people development histories.
10
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
■■ Time for independent thought—Reviewing executives are given time to consider talent independently before
discussion.
■■ Consistent standards for evaluation—Provides opportunity for executives to consider the entire slate of candidates
before beginning formal review, thus escaping “evolution of standards” as review progresses.
■■ Everyone can speak—Facilitator ensures that each executive with a comment on an individual has an opportunity to
voice that comment.
Executives spend
15 minutes evaluating
folio map with initial
talent evaluations…
…then “commit” to
voicing, in detail, any
thoughts or questions
concerning the ratings
by placing a sticky note
by specific ratings.
Results
Potential
Liz
■■ David
DECEPTIVELY SIMPLE
Steps of “Talent Scope” Calibration Exercise Output of Calibration Exercise
Benefits of Sticky Note Calibration
• Calvin
• Sapana
• Jeremy
• Linda
• David
• Judith
• Felix
• Homer
Jeff
Liz
Jeff
Jeff
Jan
• Anna
• Rob
• Tom
Low
High
High
Low
Performance Results
PotentialAssessment
Reviewing executives may flag talent
either to question or validate any
aspect of the managers’ ratings.
Jan
Liz
11
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
CORPORATE
LEADERSHIP
COUNCIL
CORPORATE EXECUTIVE BOARD
NEEDS-BASED SUCCESSION PLANNING
OVERVIEW
Duke Energy guides succession management efforts by focusing on key questions regarding executive talent supply
and demand.
12
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
Annual Succession Conferences
Do we have candidates
qualified to assume key
positions?
What are the ongoing
talent risks to the
organization?
What is the best way to
move talent in the event
of succession?
PLANNING BASED ON ORGANIZATIONAL PRIORITIES
2
43
What are the departure
risks we need to act on
now?
1
13
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
Retention Outlook
Low Medium High
Criticality
High
1% 16% 46%
Medium
2% 13% 19%
Low
1% 2% 1%
5 91 237
12 70 103
3 15 4
ASKING “WHAT” WON’T BE HERE NEXT YEAR?
Assessing Immediate Turnover Risk: Retention–Criticality Matrix1
Identify Capabilities at Risk
Executives can click on tabs within the matrix
to review at-risk talent and prepare specialized
retention strategies or plan for loss of talent.
Assess Retention Risks
■■ Total compensation
versus market
compensation
■■ Future career
opportunities within and
outside of Duke Energy
■■ Exposure to senior
managers and the
degree to which that
exposure has been
favorable
Focus on Critical Positions
By drawing out experience
and competency
requirements, position
profiles provide a means
to assess a position’s
criticality. More specifically
HR considers the following:
■■ High experience
or competence
requirements
■■ Degree to which critical
business processes
would stop if left vacant
■■ Barriers of entry to
position, stemming
from specialization
or educational
requirements
■■ Position’s impact on
customers, revenue, or
productivity
1	 All examples are hypothetical.
14
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
1	 All examples are hypothetical.
FOCUSING MANAGERS ON FIT
HR Successor Slate Evaluation
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HR compares
position-specific
criteria against
the qualifications
of identified
successors (e.g.,
competencies,
work experiences)
to determine a
candidate’s “fit”
with the position.
Candidates from both
lists are considered in
all talent reviews.
HR runs query for
alternate qualified
successors based on
position profile.
HR analyzes “fit” of
designated successors
for position.
Managers submit
list of successors for
designated positions.
Manager
Nominations for VP
Strategic Planning
	 1.	Lars Ulrich
	 2.	Eric Weiss
	 3.	Janet Bell
Successor List, VP
Strategic Planning
1.	 J. Bell	 93%
2.	 L. Ulrich	 90%
3.	 I. Smith	 85%
4.	 E. Weiss	 65%
Successor Ratio = 4:1
Successor Bench Strength Analysis1
Name Fit
1.	 L. Ulrich 90%
2.	 E. Weiss 65%
3.	 J. Bell 93%
Name Fit
1.	 I. Smith 85%
2.	 M. Hart 62%
3.	 S. Reid 57%
4.	 W. Key 49%
4321
15
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
1	 All examples are hypothetical.
MUSICAL CHAIRS
Evaluation of Chain of Moves1
Potential Successor Availability? Successor Ratio Successors Position Fit Move?
Janet Bell
Assumed current role six months
ago; currently well placed (!)
1:1 (!) David 93%
Lars Ulrich
Within three months; finishing
current assignment
3:1
Thomas; Lynne;
Seàmus
90%
Isabella Smith
One year or more (!);
engaged in critical assignment
0:1 (!) (None) 85%
Eric Weiss Immediate availability 2:1 Sylvia; Alberto 65% (!)
Successor List,
VP Strategic Planning
1.	 J. Bell	 93%
2.	 L. Ulrich	 90%
3.	 I. Smith	 85%
4.	 E. Weiss	 65%
Succession Risks
D. Roth
VP, Strategic Planning
J. Bell
First-Level
Risk
Second-Level
Risk
Manager Availability
Managers may be engaged
in critical assignments or
be well placed and not in
need of a new assignment.
Successor Ratios
Insufficient ratio of successors
requires close examination of
the risks of moving managers
out of their current roles.
Quantified “Stretch Risk”
Position fit, by showing the skill gap the
candidate will need to overcome if selected,
also gives an indication of the “stretch risk”
from placing a manager in a position.
16
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK
I
Safeguarding Critical
Business Capabilities
2
Accelerating
Full Business Exposure
3
Overcoming
New Hire Derailment
4
Maximizing Strategic Talent
Leverage
Translating Business Strategy
into Talent Strategy
Executive Talent
Growth Review
Providing Needed
Development Experiences
Experience-Based
Succession Management
Defining Needed
Behavior Changes
Executive Transition
Management
Organizing for High-Impact
Talent Utilization
Strategic Human
Capital Review
Planning for
Key Departures
Needs-Based
Succession Planning
Balancing Short-Term
Business Risk with Long-Term
Development Benefit
Non-Obvious
Development Moves
Onboarding for
Organizational Fit
New Executive
Career Launch
HIGH-IMPACT SUCCESSION MANAGEMENT
From Succession Planning to Strategic Executive Talent Management
17
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
CORPORATE
LEADERSHIP
COUNCIL
CORPORATE EXECUTIVE BOARD
EXPERIENCE-BASED SUCCESSION MANAGEMENT
OVERVIEW
IBM improves its executive development by using its succession management system to ensure more effective
matching of development experiences to executives.
18
From CLC HUMAN RESOURCES
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© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
Annual Executive
Resources Discussion
Experience-Based
Development Models
Development-Based
Succession Plans
Executive Talent
Management System
Executive
Assignment
“Five-Minute Drills”
Ongoing Experience-
Based Coaching and
Consulting
ExecutiveCoach
Support from the GEOC—To support the integration of succession
planning and executive development, IBM creates a corporate
Global Executive and Organizational Capability (GEOC) department
integrating experts in succession planning, leadership consulting,
and executive coaching, who serve as consultants to the line.
Executive
Coaching/
Consulting
Executive
Development
Succession
Planning
VP, GEOC
VP of Talent
SVP of HR
Executive Leadership
Competencies
Derailment Factors
Long-Term Development
Plan
Ultimate Potential
Business Results
AN INTEGRATED EXPERIENTIAL DEVELOPMENT SYSTEM
6
5
4321
GEOC Support Staff Profile
• Senior HR professional
• 5–10 years experience with executive coaching and consulting
General
Managers
Business
Value
Selling
Country
GM
Technical
GM
Moves to Position
Position
From
Current
Job
One Job
Away
Two Jobs
Away
VP,
Storage
Solutions
• E. Johnson
• L. Hasega
• R. Lizardi
• J. Hansen • J. Ross
• C. Norbin
19
From CLC HUMAN RESOURCES
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© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
DIFFERENT ENDS, DIFFERENT MEANS
IBM Career Development Models
Sample Country GM
Development Model
Experiences
■■ Country knowledge
■■ Government/
political interface
Sample Technical GM
Development Model
Experiences
■■ Technical/
development
experience
■■ Manufacturing
experience
■■ Technical
systemwide view
Integrate Experiences with Competencies
To create a single, cohesive development system, the GEOC team clarifies how each
experience relates to the company’s executive leadership competency model.
General
Managers
Business
Value
Selling
Country GM
Technical
GM
2
Identify Senior Leadership
Roles
• Senior roles with
significant breadth and
business impact
• Roles for which internal
successors are critical
• Differentiated by unique,
critical skill requirements
1
Identify Development
Experiences
The GEOC interviews both
successful and average
executives to identify
critical experiences for
success in each senior
leadership role.
3
Sample General
Manager
Development Model
Experiences
■■ High-stakes
assignments
■■ Handling external
pressure
Sample Business
Value Selling
Development Model
Experiences
■■ Industry experience
■■ Services experience
■■ Software
experience
20
From CLC HUMAN RESOURCES
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© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
Moves to Position
Position
From Current
Job
One Job
Away
Two Jobs
Away
VP, Storage
Solutions
■■ E. Johnson
■■ L. Hasega
■■ R. Lizardi
■■ J. Hansen ■■ J. Ross
■■ C. Norbin
TARGETING DEVELOPMENT NOT REPLACEMENT NEEDS
Succession Planning Chart
Source: “How No. I Big Blue Builds Leaders,” Chief Executive Vol. 179 (June 2002).
Development
Needs
Experience Required
Cross-Border
Partnerships
Global Project
Development Team
Team Leadership Leadership Role in
10–50 Person Unit
Ability to Build
Relationships
Cross-Cultural Role
Possible Next Jobs:
■■ VP, European e-Business Integration Team
■■ VP, Asia Data Services
Talent
Profile
Development Needs Lenses Executive Development Plan
Experiences
Competencies
Derailment Factors
Potential Successor
Shortlist
When the position
becomes vacant,
people on this list will
be evaluated for their
readiness to assume
the role.
Vitality of Bench
Enables an assessment of the breadth
of bench and the depth of the talent
supply available to fill a position.
Shifted Burden for
Development
The focus on needed jobs
creates a need to ask “what
experiences do we need
to deliver to this person
for them to develop and
to prepare them for their
ultimate position?”
3
2
1
21
From CLC HUMAN RESOURCES
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© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
MAKING THE TOUGH CALLS
Chairman’s “Five-Minute Drill” Rules
■■ Senior talent viewed as corporate, not business unit, assets
■■ Everyone is fair game—no hoarding of talent
■■ The group approves all moves for the top 300 positions
■■ All decisions are made by consensus
■■ Focus is on the capability of individuals to drive results
SVP,
Server
Group
CFO
Chairman
SVP, Software
Group
SVP of
HR
Five-Minute Drill Agenda
August 4, 2003
1.	 Recap last month’s moves
2.	 Discuss and approve appointments to known
opportunities and new positions in the top
300 positions
Position
Prioritized List
of Candidates
Others Candidates
Considered
VP,
Storage
Solutions
1.	 Rafael
Lizardi
2.	 Ashley
Gigandet
3.	 Lisa
Hasegawa
■■ Lisa Screeton—
insufficient time in
current role
■■ Kenny Baer—vital in
current position
3.	 Identify development jobs for key talent
Person
Projected
Rotation Date
Desired Development
Experience
Joe Ross Q1, 2004
Needs PL responsibility
and exposure to
complex financial
challenge
Chairman’s “Five-Minute Drill”
Forcing the Hard Discussions
The Chairman’s expectations are designed to ensure
a candid debate about the short- and long-term
costs and benefits for each executive move.
Benefits Considered:
• Network building
• Best-practice sharing
• Innovation
Costs Considered:
• Temporary
performance drop
• Executive burnout
Full Slate
Transparency
A list of other
candidates
considered but not
selected is included
to demonstrate that
there can be no
hoarding.
Executive Talent Profile
The group reviews the
executive’s talent profile and
development plan to discuss
development areas and
possible assignments.
Development Model
Experience
Competency
Score
22
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
CORPORATE
LEADERSHIP
COUNCIL
CORPORATE EXECUTIVE BOARD
NON-OBVIOUS DEVELOPMENT MOVES
OVERVIEW
As part of the succession planning process Schlumberger identifies “non-obvious” cross-business development move
opportunities for a selected group of rising high-performing leaders.
23
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
Promote and Identify
Non-Obvious Development
Move Opportunities
Balance Long-Term
and Short‑Term
Benefits and Risks
(NON) OBVIOUS DEVELOPMENT BENEFITS
Potential Gains from Non-Obvious Development Moves
Total $
Increased
HIPO
Retention
Improved
Performance
Transfer of
Best
Practices
Realization of
New Cross-
Business
Opportunities
TotalDollarValue
Analyze “Stretch Errors” to
Improve Future Risk Taking
Support Individuals
in Non‑Obvious
Development Moves
Identify HIPO Successors
Early in Their Careers
5
4
321
24
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
STARTING EARLY
Schlumberger’s HIPO Reservoir
HIPO Reservoir
9 Percent of Exempt
Population (4,300 in 2002)
Schlumberger, Ltd.
78,500 employees
Annual HIPO Identification Process
■■ Minimum three years tenure
■■ High performer
■■ High potential
Global Talent Pool (50 Percent)
Talent Profile Name: Eva Vasquéz
Position: Integrated
Project Management
Location: Jakarta,
Indonesia
■■ 68 percent under age 35
■■ Entry-level to senior executive–level
staff
■■ Global development move every
2–3 years
Development
Strategy
Candidates for Non-Obvious
Development Moves
Expert Talent Pool (50 Percent)
Name: Larry Roth
Position: Geophysicist,
Oil Field Services
Location: Paris, France
■■ Hard-to-get functional skills
■■ Premier expert in function
■■ High tenure within one function
Functional Expert Path
25
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
GOING AGAINST GUT FEEL
Development Move Risk–Return Analysis
Succession Plan, Oil Field Services
Non-Obvious Move
Discussion Items
■■ Non-obvious move
opportunities for
“ready in the future”
candidates
■■ Business benefits
■■ Business risks
■■ Chain of moves
CEO EVP
VP of HR
Low Medium High
Low
High
Medium
Long-TermBusinessBenefit
Short-Term Business Risk
Obvious Moves
■■ Direct vertical move
within same function
■■ Move of “ready
now” successor into
business-troubled
position
■■ Move into a role with
limited development
benefit
Non-Obvious Moves
■■ Cross-business or
cross-geography move
■■ Developmental stretch move
■■ Manageable risk to business
Excessive Risk Moves
■■ Cross-business move
into business-challenged
position
■■ Developmental
“over-stretch” move
■■ Excessive, non-manageable
risk to business
“Ready in the Future”
Successor Characteristics
■■ Have been identified as
high-potential
■■ Are considered for “non-
obvious” move opportunities
when vacancies appear in
other BUs
■■ Are lacking experience
and exposure in function
or businessrisk to business
Position “Ready Now” “Ready in the
Future”
VP,
Drilling and
Measurement
Director, Drilling and
Measurement, Ann King
Recruiter,
Drilling and
Measurement,
France, Young
Lee
Manager,
Drilling and
Measurement,
Africa, Lisa Gil
Manager,
Seismic, U.S.,
Tom Smith
26
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
BUILDING A SAFETY NET
HR’s Individual Risk Evaluation
Team Strength Risk Mitigation
Position-Based Risk Assessment
Potential Risk Factors
■■ Avoids conflict
■■ Micromanagement
tendency
■■ Weak communicator
Hire
Assessment
Performance
Assessment
Profiles of
Past Moves
Profiles of
Individual
Constraints
1. Strengthen
Direct Reports
3. Use Internal
Training and
Coaching
2. Delegate
High-Risk
Responsibilities
Hiring
Manager
Past Position
Holder
A World Within
Past Holders of Position
Name
Current
Position
Telephone
Extension
Rob Crist SVP, Sales x4567
Jan Miller Director… x4123
Matt Reif Manager… x4890
27
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK
I
Safeguarding Critical
Business Capabilities
2
Accelerating
Full Business Exposure
3
Overcoming
New Hire Derailment
4
Maximizing Strategic Talent
Leverage
Translating Business Strategy
into Talent Strategy
Executive Talent
Growth Review
Providing Needed
Development Experiences
Experience-Based
Succession Management
Defining Needed
Behavior Changes
Executive Transition
Management
Organizing for High-Impact
Talent Utilization
Strategic Human
Capital Review
Planning for
Key Departures
Needs-Based
Succession Planning
Balancing Short-Term
Business Risk with Long-Term
Development Benefit
Non-Obvious
Development Moves
Onboarding for
Organizational Fit
New Executive
Career Launch
HIGH-IMPACT SUCCESSION MANAGEMENT
From Succession Planning to Strategic Executive Talent Management
28
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
LOW SUCCESS RATES
Internally and Externally Hired CFOs Promoted to CEO, President,
or COO Roles
Failure of External Candidates
40%
Failed Within
18 Months
60%
Successful
in Role
Internal Hires External Hires
31
11
n = 200.
29
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
CORPORATE
LEADERSHIP
COUNCIL
CORPORATE EXECUTIVE BOARD
NEW EXECUTIVE CAREER LAUNCH
OVERVIEW
Beginning in 2001 American Express launched a suite of initiatives to overcome the problem of early external hire
departure, in particular the company focused on three key components of the onboarding process.
30
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
AVOIDING NEW HIRE STALL POINTS
Key Elements of New Executive Career Launch
■■ Uses onboarding interventions
to proactively manage new hire
expectations across the first year.
■■ Overcomes performance-
damaging peaks and troughs
in attitude toward the new role.
■■ Focuses the individual on long-
term development and uses
coaching to overcome potential
early derailers.
■■ Communicates acceptance of
development needs and ensures
that the new hire understands
the organization’s long-term
commitment to them.
■■ Goes beyond exposing individuals
to critical stakeholders to fostering
meaningful relationships.
■■ Provides new hires the networks
they need to succeed in company
consensus–driven culture.
Managing the
Expectation–Reality Gap
1
12 Months4–7 Months1 Month
NewHire
Perception
ofNewRole
Highly
Pessimistic
Highly
Optimistic
Initiating Development
at the Point of Hire
2
Build Key Relationships
for New Executives
3
31
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
“THE EXPECTATION–REALITY ROLLER COASTER”
Change in New Executive Hire Attitude Toward Company
First Year of Employment
Highly
Optimistic
Highly
Pessimistic
NewHirePerception
ofOrganization
1 Month 12 Months4–7 Months
Typical New Hire Experience
Desired New Hire Experience
High Potential for Performance Errors
“Reality Check”
Managing Down Expectations
■■ No “Duty Free” Onboarding
■■ Immediate Development
Requirements
“These Things Take Time”
Managing up Expectations
■■ 360-Degree Feedback
■■ Feedback in Context
“We’re Betting on You”
Ongoing Solutions for Success
■■ A New Plan
■■ Emphasis on Organizational
Commitment
32
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
AN IMMEDIATE FOCUS ON LONG-TERM DEVELOPMENT
American Express Parallel Development Focus
Early Focus
on Long-Term
Development
Leader
Benchmarking
From Assessment
to Development
Long-Term IDP
Within 30 Days
Individual Development Plan
Goal One: Manage cross-
functional reorganization
Goal Two: Work toward
AEXP “innovation” leadership
standard
Parallel
Focus
on Role-
Based
Learning
On-Call Assimilation Assistant
■■ HR provides an assistant to serve as
“on-call” support to answer simple
orientation questions for the new hire.
■■ Because the assistant is outside
the business unit, there is no stigma
associated with asking “basic” questions.
100–Day Organizational Learning Plan
■■ HR provides a templated “First 100 Days” plan that
covers all major “exposure” points an individual
needs to master the role.
■■ Plan provides step-by-step series of checklists,
contacts, and activities to follow.
Point
of Hire
External Assessment
© 2001 Corporate Executive Board
Catalyst
Adaptor
Orchestrator
CultivatorRelationship
Builder
Visionary
Goal
Driver
Step #4: Evaluate Rising Leaders’ Scores Against Top Executive Norms
Story Behind the Numbers
Pre-Executives’ Scores Are Summed and Analyzed Against Norms
Spider Graph Comparison*Pre-Executive Scorecard*
* Corporate Leadership Council illustrative.
3.5
Source: GE Medical Systems; Corporate Leadership Council research.
7.0
18b
0.0
Leadership Development
Needs of Bob Oliver
(in order of priority)
• Relationship Builder
• Visionary
• Cultivator
Bob Oliver’s Scores
Average Scores of Top Executives
Catalyst 7 6.2
Adaptor 6 6.5
Orchestrator 5 5.3
Cultivator 6 6.6
Relationship Builder 5 5.7
Visionary 5 5.6
Goal Driver 7 6.6
Category
Individual
Category
Score
Top
Executive
Norm
Scores
Name:Bob Oliver
Development
Needs Assessment*
“Norm” scores are
derived from average
scores of current top
executive responses.
New Hire Manager
Pre Hire
Immediate
Orientation
Early
Development
Planning
33
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
MORE THAN JUST MEET AND GREET
Three Levels of Relationship Building
I
Pre-Booked
Calendar of Meetings
2
Perspective Exchange
Opportunities
3
Cross-Business
Networking
CRITICAL ELEMENTS ENCOURAGING NETWORK DEVELOPMENT
Instilling a Sense of Contribution Tapping for New Ideas Building Cohorts
Meeting with the CEO New Hire Perspective Forum Annual New Leader Summit
Gaining Multiple Views
of the Organization
Meeting Customers
34
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK
I
Safeguarding Critical
Business Capabilities
2
Accelerating
Full Business Exposure
3
Overcoming
New Hire Derailment
4
Maximizing Strategic Talent
Leverage
Translating Business Strategy
into Talent Strategy
Executive Talent
Growth Review
Providing Needed
Development Experiences
Experience-Based
Succession Management
Defining Needed
Behavior Changes
Executive Transition
Management
Organizing for High-Impact
Talent Utilization
Strategic Human
Capital Review
Planning for
Key Departures
Needs-Based
Succession Planning
Balancing Short-Term
Business Risk with Long-Term
Development Benefit
Non-Obvious
Development Moves
Onboarding for
Organizational Fit
New Executive
Career Launch
HIGH-IMPACT SUCCESSION MANAGEMENT
From Succession Planning to Strategic Executive Talent Management
35
From CLC HUMAN RESOURCES
www.clc.executiveboard.com
© 2011 The Corporate Executive Board Company.
All Rights Reserved. CLC0232011SYN
WRONG PLACE, WRONG TIME, WRONG JOB
“Untapped Opportunity?”
Asking Too Much?
33%
15%
PointofOptimumLeverage
49%
Meeting Business
Objectives
51%
Not Meeting
Business Objectives
1	 From “War for Talent,” The McKinsey Quarterly (3 November 1998): 44–57.
Percentage of Leaders Not Meeting Business ObjectivesExecutive Leverage1

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Succession Planning

  • 1. CLC HUMAN RESOURCES CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD High-Impact Succession Management An Overview of CLC Human Resources’ Best Practices Research Webinar
  • 2. A FRAMEWORK FOR MEMBER CONVERSATIONS The mission of the Corporate Executive Board is to create revolutionary economic advantage for leaders of the world’s great enterprises by enabling them to act with unparalleled intelligence and confidence. We lift their performance at key decision points and career moments by delivering insight drawn from the most powerful global executive and professional network. When we bring leaders together, it is crucial that our discussions neither restrict competition nor improperly share inside information. All other conversations are welcomed and encouraged. We look forward to the continued and robust sharing of insights by member executives and professionals at Corporate Executive Board events. COPIES AND COPYRIGHT As always, members are welcome to an unlimited number of copies of the materials contained within this handout. Furthermore, members may copy any graphic herein for their own internal purpose. The Corporate Executive Board Company requests only that members retain the copyright mark on all pages produced. Please contact your Member Support Center at +1-866-913-6447 for any help we may provide. The pages herein are the property of The Corporate Executive Board Company. Beyond the membership, no copyrighted materials of The Corporate Executive Board Company may be reproduced without prior approval. LEGAL CAVEAT CLC Human Resources has worked to ensure the accuracy of the information it provides to its members. This report relies upon data obtained from many sources, however, and CLC Human Resources cannot guarantee the accuracy of the information or its analysis in all cases. Furthermore, CLC Human Resources is not engaged in rendering legal, accounting, or other professional services. Its reports should not be construed as professional advice on any particular set of facts or circumstances. Members requiring such services are advised to consult an appropriate professional. Neither The Corporate Executive Board Company nor its programs are responsible for any claims or losses that may arise from a) any errors or omissions in their reports, whether caused by CLC Human Resources or its sources, or b) reliance upon any recommendation made by CLC Human Resources.
  • 3. 3 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN UNPACKING SUCCESSION RISK The Four Succession Risks Portfolio Risk Risk of poor deployment of talent against business goals. Supporting Organization- Wide Objectives 4 Readiness Risk Risk of underdeveloped successors. Transition Risk Risk of poor assimilation of executive talent into the organization. Enabling High Performance of Successors 32 Vacancy Risk Risk of critical leadership positions being vacant. Fixing the Succession Planning Process 1
  • 4. 4 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Risks Vacancy Risk Readiness Risk Transition Risk Portfolio Risk Risk Management Imperatives Safeguard Critical Business Capabilities Accelerate Full Business Exposure Overcome New Hire Derailment Maximize Strategic Talent Leverage FROM RISK TO OPPORTUNITY Four Risks: Four Imperatives
  • 5. 5 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN HIGH-IMPACT SUCCESSION MANAGEMENT From Succession Planning to Strategic Executive Talent Management VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK I Safeguarding Critical Business Capabilities 2 Accelerating Full Business Exposure 3 Overcoming New Hire Derailment 4 Maximizing Strategic Talent Leverage Translating Business Strategy into Talent Strategy Executive Talent Growth Review Providing Needed Development Experiences Experience-Based Succession Management Defining Needed Behavior Changes Executive Transition Management Organizing for High-Impact Talent Utilization Strategic Human Capital Review Planning for Key Departures Needs-Based Succession Planning Balancing Short-Term Business Risk with Long-Term Development Benefit Non-Obvious Development Moves Onboarding for Organizational Fit New Executive Career Launch
  • 6. 6 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN OVERLY DEMOCRATIC PROCESS, WASTED EFFORTS Overall Comparison of Vacancy Risk VP of R&D and CFO Source: Corporate Leadership Council 2003 Succession Management Survey. People and Positions Covered by Succession Management Process1 Position A: VP of R&D Position B: CFO Urgency on Time-to-Fill High High Overall Impact on Business High High Scarcity of Skill Set in the Labor Market High Low Short-Term Cost of Vacancy High Medium Long-Term Cost of Vacancy High High Vacancy Risk High Medium 93% 56% 41% 24% 13% AllPositionsAbove aCertainLevel AllHigh-Potential Employees AllPositionswithSignificant ImpactonBusiness AllPositionsThat RequireSpecializedSkills, Abilities,orExpertise AllPeopleorPositions DifficulttoFindin ExternalLaborMarket n = 234. 1 Respondents could select multiple responses.
  • 7. 7 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD EXECUTIVE TALENT GROWTH REVIEW OVERVIEW Johnson & Johnson protects business-critical capabilities through developing a talent review methodology designed to rigorously assess and plan for senior executive growth.
  • 8. 8 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN MIND THE TALENT GAP Embed Talent Growth Imperative Conduct Talent Review “Roll- Up” Strategy Develop an Aggregate View of Growth Assets Strengthen Quality of Talent Review Dialogue Commit to Rigorous Examination of Talent Options Drive to $80 Billion in Revenue 54321 Number of Senior Executives1 Revenue 1,000 500 0 Year 1 Year 3 Year 5 $100B $60B $20B 1 Actual numbers disguised.
  • 9. 9 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN FOUR LENSES ON EXECUTIVE CAPABILITY Johnson & Johnson’s “Folio Map” 5 4 4 4 4 3 3 3 2 Keepers—Soundly performing executives, whose potential matches their level of accountability. Movers: Blockers—Executives can identify managers with low results or potential “blocking” the development of rising leaders. Low High High Low Performance Results THE FOUR LENSES 1. Potential Assessment 2. Performance Results 3. Position’s Level of Accountability 4. People Development Codes 5–Outstanding 4–Superior 3–Competent 2–Needs Improvement 1–Unacceptable Size of Circle PotentialAssessment Source: Fulmer, Robert, “Johnson Johnson: Frameworks for Leadership,” Organizational Dynamics, Vol. 29, no. 3, 2001. Growers—Enables identification of high-potential, high-results executives in need of development assignments. Movers: Underperformers— Employees needing reassignment based on suboptimal performance or people development histories.
  • 10. 10 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN ■■ Time for independent thought—Reviewing executives are given time to consider talent independently before discussion. ■■ Consistent standards for evaluation—Provides opportunity for executives to consider the entire slate of candidates before beginning formal review, thus escaping “evolution of standards” as review progresses. ■■ Everyone can speak—Facilitator ensures that each executive with a comment on an individual has an opportunity to voice that comment. Executives spend 15 minutes evaluating folio map with initial talent evaluations… …then “commit” to voicing, in detail, any thoughts or questions concerning the ratings by placing a sticky note by specific ratings. Results Potential Liz ■■ David DECEPTIVELY SIMPLE Steps of “Talent Scope” Calibration Exercise Output of Calibration Exercise Benefits of Sticky Note Calibration • Calvin • Sapana • Jeremy • Linda • David • Judith • Felix • Homer Jeff Liz Jeff Jeff Jan • Anna • Rob • Tom Low High High Low Performance Results PotentialAssessment Reviewing executives may flag talent either to question or validate any aspect of the managers’ ratings. Jan Liz
  • 11. 11 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD NEEDS-BASED SUCCESSION PLANNING OVERVIEW Duke Energy guides succession management efforts by focusing on key questions regarding executive talent supply and demand.
  • 12. 12 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Annual Succession Conferences Do we have candidates qualified to assume key positions? What are the ongoing talent risks to the organization? What is the best way to move talent in the event of succession? PLANNING BASED ON ORGANIZATIONAL PRIORITIES 2 43 What are the departure risks we need to act on now? 1
  • 13. 13 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Retention Outlook Low Medium High Criticality High 1% 16% 46% Medium 2% 13% 19% Low 1% 2% 1% 5 91 237 12 70 103 3 15 4 ASKING “WHAT” WON’T BE HERE NEXT YEAR? Assessing Immediate Turnover Risk: Retention–Criticality Matrix1 Identify Capabilities at Risk Executives can click on tabs within the matrix to review at-risk talent and prepare specialized retention strategies or plan for loss of talent. Assess Retention Risks ■■ Total compensation versus market compensation ■■ Future career opportunities within and outside of Duke Energy ■■ Exposure to senior managers and the degree to which that exposure has been favorable Focus on Critical Positions By drawing out experience and competency requirements, position profiles provide a means to assess a position’s criticality. More specifically HR considers the following: ■■ High experience or competence requirements ■■ Degree to which critical business processes would stop if left vacant ■■ Barriers of entry to position, stemming from specialization or educational requirements ■■ Position’s impact on customers, revenue, or productivity 1 All examples are hypothetical.
  • 14. 14 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN 1 All examples are hypothetical. FOCUSING MANAGERS ON FIT HR Successor Slate Evaluation ,QFXPEHQW 5HSRUWV 7R 3RVLWLRQ 6WRQH 'HEUD 0 'HEELH
  • 15. 693 %ROG (QHUJ 6ROXWLRQV -DPHV 'RQDOG %5HSRUWV 7R 3RVLWLRQ 7LWOH 93 6WUDWHJLF 3ODQQLQJ )LQ $GPLQ %XVLQHVV *URXS *OREDO (QHUJ %XVLQHVV 8QLW %ROG (QHUJ 6ROXWLRQV 'HSDUWPHQW %ROG (QHUJ 6ROXWLRQV *OREDO ([HFXWLYH 0DQDJHPHQW 6VWHP *(06
  • 16. 866RXWKHDVW P P 3RVLWLRQ 3URILOH ,QFXPEHQW (PSORHH ,' $JH -RE 7HQXUH RPSDQ 7HQXUH 3HRSOH 5HVSRQVLEOH )RU/RFDWLRQ /RFDWLRQ $FFRXQWDELOLW DQG 5HVSRQVLELOLW /HYHOV 86 LQ 0LOOLRQV 5HVSRQVLEOH )RU FRPSOHWHG E 0DQDJHU RI WKLV 3RVLWLRQ
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  • 22. 6666 3333 7DOHQW 3URILOH $FFRXQWDELOLW /HYHO 2SHUDWLRQDO /HDGHU FRPSOHWHG E (PSORHH V 0DQDJHU
  • 23. 5HDGLQHVV 0DMRU $FFRPSOLVKPHQWV $FFRXQWDELOLW /HYHO7LPH)UDPH 6XFFHVVLRQ DQGLGDWH )RU 3RVLWLRQ %XVLQHVV *URXS 5HDGLQHVV5DQN $FFRXQWDELOLW /HYHO 2YHUDOO 3HUIRPDQFH 2SHUDWLRQDO 5HVXOWV )LQDQFLDO 5HVXOWV $WWUDFWLQJ 'HYHORSLQJ DQG 5HWDLQLQJ 3HRSOH 2YHUDOO 5DWLQJ 'DWH %XV ,QWHJUDWLRQ RPPO )RFXV 5LVN 0JPW 6WU 3HUVSHFWLYH 7HFK RU )XQF RPP 0JPW 'HFLVLRQ 0DNLQJ /HDGHUVKLS 5HVXOWV )RFXV 7HDP %XLOGLQJ 7HFK ,QQRYDWLRQ (WKLFV ,QIOXHQFH 1HJRW ,QWHUSHUV RPP 6HOI $ZDUHQHVV /HDGHUVKLS RPSHWHQFLHV %XVLQHVV 0DVWHU 0DQDJHPHQW 0DVWHU 3HUVRQDO 0DVWHU 5ROH 0RGHO +LJKO (IIHFWLYH (IIHFWLYH 0LQLPDOO (IIHFWLYH 1RW 5DWHG /RZ 0HGLXP +LJK 5HWHQWLRQ /HYHO ULWLFDOLW +LJK 0HGLXP /RZ 6XFFHVVIXOO LPSOHPHQWHG QHZ VWUDWHJLF SODQQLQJ SURFHVV WKDW ZDV PDMRU FRQWULEXWRU WR H[FHHGLQJ HELW WDUJHWV RQWLQXHV WR GHPRQVWUDWH RSHUDWLRQDO H[FHOOHQFH LQ DOO DVVLJQHG IXQFWLRQV 6RPH LPSURYHPHQW QHHGHG LQ FUHDWLQJ SRVLWLYH ZRUN HQYLURQPHQW 7XUQRYHU RI VRPH NH SHRSOH KDV EHHQ KLJKHU WKDQ H[SHFWHG 6LJQLILFDQWO ([FHHGV ([FHHGV 3DUWLDOO 0HHWV ([FHHGV 2SHUDWLRQDO /HDGHU 2SHUDWLRQDO /HDGHU %XVLQHVV 6HJPHQW /HDGHU %XVLQHVV 6HJPHQW /HDGHU 5HDG 1RZ 5HDG LQ WR HDUV 5HDG LQ WR HDUV 5HDG LQ WR HDUV RQILGHQWLDO ,QWHUQDO 8VH 2QO 3DJH (PSORHH 3URILOH 5HSRUW HR compares position-specific criteria against the qualifications of identified successors (e.g., competencies, work experiences) to determine a candidate’s “fit” with the position. Candidates from both lists are considered in all talent reviews. HR runs query for alternate qualified successors based on position profile. HR analyzes “fit” of designated successors for position. Managers submit list of successors for designated positions. Manager Nominations for VP Strategic Planning 1. Lars Ulrich 2. Eric Weiss 3. Janet Bell Successor List, VP Strategic Planning 1. J. Bell 93% 2. L. Ulrich 90% 3. I. Smith 85% 4. E. Weiss 65% Successor Ratio = 4:1 Successor Bench Strength Analysis1 Name Fit 1. L. Ulrich 90% 2. E. Weiss 65% 3. J. Bell 93% Name Fit 1. I. Smith 85% 2. M. Hart 62% 3. S. Reid 57% 4. W. Key 49% 4321
  • 24. 15 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN 1 All examples are hypothetical. MUSICAL CHAIRS Evaluation of Chain of Moves1 Potential Successor Availability? Successor Ratio Successors Position Fit Move? Janet Bell Assumed current role six months ago; currently well placed (!) 1:1 (!) David 93% Lars Ulrich Within three months; finishing current assignment 3:1 Thomas; Lynne; Seàmus 90% Isabella Smith One year or more (!); engaged in critical assignment 0:1 (!) (None) 85% Eric Weiss Immediate availability 2:1 Sylvia; Alberto 65% (!) Successor List, VP Strategic Planning 1. J. Bell 93% 2. L. Ulrich 90% 3. I. Smith 85% 4. E. Weiss 65% Succession Risks D. Roth VP, Strategic Planning J. Bell First-Level Risk Second-Level Risk Manager Availability Managers may be engaged in critical assignments or be well placed and not in need of a new assignment. Successor Ratios Insufficient ratio of successors requires close examination of the risks of moving managers out of their current roles. Quantified “Stretch Risk” Position fit, by showing the skill gap the candidate will need to overcome if selected, also gives an indication of the “stretch risk” from placing a manager in a position.
  • 25. 16 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK I Safeguarding Critical Business Capabilities 2 Accelerating Full Business Exposure 3 Overcoming New Hire Derailment 4 Maximizing Strategic Talent Leverage Translating Business Strategy into Talent Strategy Executive Talent Growth Review Providing Needed Development Experiences Experience-Based Succession Management Defining Needed Behavior Changes Executive Transition Management Organizing for High-Impact Talent Utilization Strategic Human Capital Review Planning for Key Departures Needs-Based Succession Planning Balancing Short-Term Business Risk with Long-Term Development Benefit Non-Obvious Development Moves Onboarding for Organizational Fit New Executive Career Launch HIGH-IMPACT SUCCESSION MANAGEMENT From Succession Planning to Strategic Executive Talent Management
  • 26. 17 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD EXPERIENCE-BASED SUCCESSION MANAGEMENT OVERVIEW IBM improves its executive development by using its succession management system to ensure more effective matching of development experiences to executives.
  • 27. 18 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Annual Executive Resources Discussion Experience-Based Development Models Development-Based Succession Plans Executive Talent Management System Executive Assignment “Five-Minute Drills” Ongoing Experience- Based Coaching and Consulting ExecutiveCoach Support from the GEOC—To support the integration of succession planning and executive development, IBM creates a corporate Global Executive and Organizational Capability (GEOC) department integrating experts in succession planning, leadership consulting, and executive coaching, who serve as consultants to the line. Executive Coaching/ Consulting Executive Development Succession Planning VP, GEOC VP of Talent SVP of HR Executive Leadership Competencies Derailment Factors Long-Term Development Plan Ultimate Potential Business Results AN INTEGRATED EXPERIENTIAL DEVELOPMENT SYSTEM 6 5 4321 GEOC Support Staff Profile • Senior HR professional • 5–10 years experience with executive coaching and consulting General Managers Business Value Selling Country GM Technical GM Moves to Position Position From Current Job One Job Away Two Jobs Away VP, Storage Solutions • E. Johnson • L. Hasega • R. Lizardi • J. Hansen • J. Ross • C. Norbin
  • 28. 19 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN DIFFERENT ENDS, DIFFERENT MEANS IBM Career Development Models Sample Country GM Development Model Experiences ■■ Country knowledge ■■ Government/ political interface Sample Technical GM Development Model Experiences ■■ Technical/ development experience ■■ Manufacturing experience ■■ Technical systemwide view Integrate Experiences with Competencies To create a single, cohesive development system, the GEOC team clarifies how each experience relates to the company’s executive leadership competency model. General Managers Business Value Selling Country GM Technical GM 2 Identify Senior Leadership Roles • Senior roles with significant breadth and business impact • Roles for which internal successors are critical • Differentiated by unique, critical skill requirements 1 Identify Development Experiences The GEOC interviews both successful and average executives to identify critical experiences for success in each senior leadership role. 3 Sample General Manager Development Model Experiences ■■ High-stakes assignments ■■ Handling external pressure Sample Business Value Selling Development Model Experiences ■■ Industry experience ■■ Services experience ■■ Software experience
  • 29. 20 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Moves to Position Position From Current Job One Job Away Two Jobs Away VP, Storage Solutions ■■ E. Johnson ■■ L. Hasega ■■ R. Lizardi ■■ J. Hansen ■■ J. Ross ■■ C. Norbin TARGETING DEVELOPMENT NOT REPLACEMENT NEEDS Succession Planning Chart Source: “How No. I Big Blue Builds Leaders,” Chief Executive Vol. 179 (June 2002). Development Needs Experience Required Cross-Border Partnerships Global Project Development Team Team Leadership Leadership Role in 10–50 Person Unit Ability to Build Relationships Cross-Cultural Role Possible Next Jobs: ■■ VP, European e-Business Integration Team ■■ VP, Asia Data Services Talent Profile Development Needs Lenses Executive Development Plan Experiences Competencies Derailment Factors Potential Successor Shortlist When the position becomes vacant, people on this list will be evaluated for their readiness to assume the role. Vitality of Bench Enables an assessment of the breadth of bench and the depth of the talent supply available to fill a position. Shifted Burden for Development The focus on needed jobs creates a need to ask “what experiences do we need to deliver to this person for them to develop and to prepare them for their ultimate position?” 3 2 1
  • 30. 21 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN MAKING THE TOUGH CALLS Chairman’s “Five-Minute Drill” Rules ■■ Senior talent viewed as corporate, not business unit, assets ■■ Everyone is fair game—no hoarding of talent ■■ The group approves all moves for the top 300 positions ■■ All decisions are made by consensus ■■ Focus is on the capability of individuals to drive results SVP, Server Group CFO Chairman SVP, Software Group SVP of HR Five-Minute Drill Agenda August 4, 2003 1. Recap last month’s moves 2. Discuss and approve appointments to known opportunities and new positions in the top 300 positions Position Prioritized List of Candidates Others Candidates Considered VP, Storage Solutions 1. Rafael Lizardi 2. Ashley Gigandet 3. Lisa Hasegawa ■■ Lisa Screeton— insufficient time in current role ■■ Kenny Baer—vital in current position 3. Identify development jobs for key talent Person Projected Rotation Date Desired Development Experience Joe Ross Q1, 2004 Needs PL responsibility and exposure to complex financial challenge Chairman’s “Five-Minute Drill” Forcing the Hard Discussions The Chairman’s expectations are designed to ensure a candid debate about the short- and long-term costs and benefits for each executive move. Benefits Considered: • Network building • Best-practice sharing • Innovation Costs Considered: • Temporary performance drop • Executive burnout Full Slate Transparency A list of other candidates considered but not selected is included to demonstrate that there can be no hoarding. Executive Talent Profile The group reviews the executive’s talent profile and development plan to discuss development areas and possible assignments. Development Model Experience Competency Score
  • 31. 22 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD NON-OBVIOUS DEVELOPMENT MOVES OVERVIEW As part of the succession planning process Schlumberger identifies “non-obvious” cross-business development move opportunities for a selected group of rising high-performing leaders.
  • 32. 23 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Promote and Identify Non-Obvious Development Move Opportunities Balance Long-Term and Short‑Term Benefits and Risks (NON) OBVIOUS DEVELOPMENT BENEFITS Potential Gains from Non-Obvious Development Moves Total $ Increased HIPO Retention Improved Performance Transfer of Best Practices Realization of New Cross- Business Opportunities TotalDollarValue Analyze “Stretch Errors” to Improve Future Risk Taking Support Individuals in Non‑Obvious Development Moves Identify HIPO Successors Early in Their Careers 5 4 321
  • 33. 24 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN STARTING EARLY Schlumberger’s HIPO Reservoir HIPO Reservoir 9 Percent of Exempt Population (4,300 in 2002) Schlumberger, Ltd. 78,500 employees Annual HIPO Identification Process ■■ Minimum three years tenure ■■ High performer ■■ High potential Global Talent Pool (50 Percent) Talent Profile Name: Eva Vasquéz Position: Integrated Project Management Location: Jakarta, Indonesia ■■ 68 percent under age 35 ■■ Entry-level to senior executive–level staff ■■ Global development move every 2–3 years Development Strategy Candidates for Non-Obvious Development Moves Expert Talent Pool (50 Percent) Name: Larry Roth Position: Geophysicist, Oil Field Services Location: Paris, France ■■ Hard-to-get functional skills ■■ Premier expert in function ■■ High tenure within one function Functional Expert Path
  • 34. 25 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN GOING AGAINST GUT FEEL Development Move Risk–Return Analysis Succession Plan, Oil Field Services Non-Obvious Move Discussion Items ■■ Non-obvious move opportunities for “ready in the future” candidates ■■ Business benefits ■■ Business risks ■■ Chain of moves CEO EVP VP of HR Low Medium High Low High Medium Long-TermBusinessBenefit Short-Term Business Risk Obvious Moves ■■ Direct vertical move within same function ■■ Move of “ready now” successor into business-troubled position ■■ Move into a role with limited development benefit Non-Obvious Moves ■■ Cross-business or cross-geography move ■■ Developmental stretch move ■■ Manageable risk to business Excessive Risk Moves ■■ Cross-business move into business-challenged position ■■ Developmental “over-stretch” move ■■ Excessive, non-manageable risk to business “Ready in the Future” Successor Characteristics ■■ Have been identified as high-potential ■■ Are considered for “non- obvious” move opportunities when vacancies appear in other BUs ■■ Are lacking experience and exposure in function or businessrisk to business Position “Ready Now” “Ready in the Future” VP, Drilling and Measurement Director, Drilling and Measurement, Ann King Recruiter, Drilling and Measurement, France, Young Lee Manager, Drilling and Measurement, Africa, Lisa Gil Manager, Seismic, U.S., Tom Smith
  • 35. 26 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN BUILDING A SAFETY NET HR’s Individual Risk Evaluation Team Strength Risk Mitigation Position-Based Risk Assessment Potential Risk Factors ■■ Avoids conflict ■■ Micromanagement tendency ■■ Weak communicator Hire Assessment Performance Assessment Profiles of Past Moves Profiles of Individual Constraints 1. Strengthen Direct Reports 3. Use Internal Training and Coaching 2. Delegate High-Risk Responsibilities Hiring Manager Past Position Holder A World Within Past Holders of Position Name Current Position Telephone Extension Rob Crist SVP, Sales x4567 Jan Miller Director… x4123 Matt Reif Manager… x4890
  • 36. 27 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK I Safeguarding Critical Business Capabilities 2 Accelerating Full Business Exposure 3 Overcoming New Hire Derailment 4 Maximizing Strategic Talent Leverage Translating Business Strategy into Talent Strategy Executive Talent Growth Review Providing Needed Development Experiences Experience-Based Succession Management Defining Needed Behavior Changes Executive Transition Management Organizing for High-Impact Talent Utilization Strategic Human Capital Review Planning for Key Departures Needs-Based Succession Planning Balancing Short-Term Business Risk with Long-Term Development Benefit Non-Obvious Development Moves Onboarding for Organizational Fit New Executive Career Launch HIGH-IMPACT SUCCESSION MANAGEMENT From Succession Planning to Strategic Executive Talent Management
  • 37. 28 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN LOW SUCCESS RATES Internally and Externally Hired CFOs Promoted to CEO, President, or COO Roles Failure of External Candidates 40% Failed Within 18 Months 60% Successful in Role Internal Hires External Hires 31 11 n = 200.
  • 38. 29 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD NEW EXECUTIVE CAREER LAUNCH OVERVIEW Beginning in 2001 American Express launched a suite of initiatives to overcome the problem of early external hire departure, in particular the company focused on three key components of the onboarding process.
  • 39. 30 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN AVOIDING NEW HIRE STALL POINTS Key Elements of New Executive Career Launch ■■ Uses onboarding interventions to proactively manage new hire expectations across the first year. ■■ Overcomes performance- damaging peaks and troughs in attitude toward the new role. ■■ Focuses the individual on long- term development and uses coaching to overcome potential early derailers. ■■ Communicates acceptance of development needs and ensures that the new hire understands the organization’s long-term commitment to them. ■■ Goes beyond exposing individuals to critical stakeholders to fostering meaningful relationships. ■■ Provides new hires the networks they need to succeed in company consensus–driven culture. Managing the Expectation–Reality Gap 1 12 Months4–7 Months1 Month NewHire Perception ofNewRole Highly Pessimistic Highly Optimistic Initiating Development at the Point of Hire 2 Build Key Relationships for New Executives 3
  • 40. 31 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN “THE EXPECTATION–REALITY ROLLER COASTER” Change in New Executive Hire Attitude Toward Company First Year of Employment Highly Optimistic Highly Pessimistic NewHirePerception ofOrganization 1 Month 12 Months4–7 Months Typical New Hire Experience Desired New Hire Experience High Potential for Performance Errors “Reality Check” Managing Down Expectations ■■ No “Duty Free” Onboarding ■■ Immediate Development Requirements “These Things Take Time” Managing up Expectations ■■ 360-Degree Feedback ■■ Feedback in Context “We’re Betting on You” Ongoing Solutions for Success ■■ A New Plan ■■ Emphasis on Organizational Commitment
  • 41. 32 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN AN IMMEDIATE FOCUS ON LONG-TERM DEVELOPMENT American Express Parallel Development Focus Early Focus on Long-Term Development Leader Benchmarking From Assessment to Development Long-Term IDP Within 30 Days Individual Development Plan Goal One: Manage cross- functional reorganization Goal Two: Work toward AEXP “innovation” leadership standard Parallel Focus on Role- Based Learning On-Call Assimilation Assistant ■■ HR provides an assistant to serve as “on-call” support to answer simple orientation questions for the new hire. ■■ Because the assistant is outside the business unit, there is no stigma associated with asking “basic” questions. 100–Day Organizational Learning Plan ■■ HR provides a templated “First 100 Days” plan that covers all major “exposure” points an individual needs to master the role. ■■ Plan provides step-by-step series of checklists, contacts, and activities to follow. Point of Hire External Assessment © 2001 Corporate Executive Board Catalyst Adaptor Orchestrator CultivatorRelationship Builder Visionary Goal Driver Step #4: Evaluate Rising Leaders’ Scores Against Top Executive Norms Story Behind the Numbers Pre-Executives’ Scores Are Summed and Analyzed Against Norms Spider Graph Comparison*Pre-Executive Scorecard* * Corporate Leadership Council illustrative. 3.5 Source: GE Medical Systems; Corporate Leadership Council research. 7.0 18b 0.0 Leadership Development Needs of Bob Oliver (in order of priority) • Relationship Builder • Visionary • Cultivator Bob Oliver’s Scores Average Scores of Top Executives Catalyst 7 6.2 Adaptor 6 6.5 Orchestrator 5 5.3 Cultivator 6 6.6 Relationship Builder 5 5.7 Visionary 5 5.6 Goal Driver 7 6.6 Category Individual Category Score Top Executive Norm Scores Name:Bob Oliver Development Needs Assessment* “Norm” scores are derived from average scores of current top executive responses. New Hire Manager Pre Hire Immediate Orientation Early Development Planning
  • 42. 33 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN MORE THAN JUST MEET AND GREET Three Levels of Relationship Building I Pre-Booked Calendar of Meetings 2 Perspective Exchange Opportunities 3 Cross-Business Networking CRITICAL ELEMENTS ENCOURAGING NETWORK DEVELOPMENT Instilling a Sense of Contribution Tapping for New Ideas Building Cohorts Meeting with the CEO New Hire Perspective Forum Annual New Leader Summit Gaining Multiple Views of the Organization Meeting Customers
  • 43. 34 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN VACANCY RISK READINESS RISK TRANSITION RISK PORTFOLIO RISK I Safeguarding Critical Business Capabilities 2 Accelerating Full Business Exposure 3 Overcoming New Hire Derailment 4 Maximizing Strategic Talent Leverage Translating Business Strategy into Talent Strategy Executive Talent Growth Review Providing Needed Development Experiences Experience-Based Succession Management Defining Needed Behavior Changes Executive Transition Management Organizing for High-Impact Talent Utilization Strategic Human Capital Review Planning for Key Departures Needs-Based Succession Planning Balancing Short-Term Business Risk with Long-Term Development Benefit Non-Obvious Development Moves Onboarding for Organizational Fit New Executive Career Launch HIGH-IMPACT SUCCESSION MANAGEMENT From Succession Planning to Strategic Executive Talent Management
  • 44. 35 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN WRONG PLACE, WRONG TIME, WRONG JOB “Untapped Opportunity?” Asking Too Much? 33% 15% PointofOptimumLeverage 49% Meeting Business Objectives 51% Not Meeting Business Objectives 1 From “War for Talent,” The McKinsey Quarterly (3 November 1998): 44–57. Percentage of Leaders Not Meeting Business ObjectivesExecutive Leverage1
  • 45. 36 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD STRATEGIC HUMAN CAPITAL REVIEW OVERVIEW Marriott’s HR department creates a succession management system that provides line managers the tools, skills, and impetus to ensure continuous alignment of talent and organizational capabilities with business priorities.
  • 46. 37 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN THINKING OUTSIDE OF THE BOX Expand Scope of the Succession Management Process to Include Organizational Capability 1 Ensure Accountability for Driving Talent— Organization Alignment 4 Enhance Talent Assessment Criteria 2 Enable Business Unit Talent—Organization Alignment 5 Enable Business Unit Evaluation of Organizational Design and Talent Implications 3 Rating Organizational Capability Focus Area E F C I Organization Design/Organizational Structure Design q q q q Organization Design/Process Design q q q q Organization Design/Job Design q q q q Business/Culture Alignment q q q q Performance Management System and Measurement Frameworks q q q q Change and Learning Management q q q q Project Plan Enablers of Change ❏ Purpose and goal explained ❏ New department mission clear ❏ Training in place to support group Talent Management Organizational Capability Business Priorities
  • 47. 38 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Have we established the right organizational circumstances to get maximum ROI from our talent? Areas Reviewed ■■ Organizational Design (Structure, Process, and Job) ■■ Business Culture Alignment ■■ Change and Learning Management ■■ Performance Measurement Systems EVP, BU THE THIRD LEG OF THE STOOL Marriott’s Human Capital Review Annual meetings are held between the president/COO and each business unit EVP to discuss in depth the unit’s talent health, organizational structure, and needs. Are we attracting, developing, and retaining the best industry talent? Areas Reviewed ■■ Talent Acquisition ■■ Performance Development ■■ Total Compensation ■■ Work Environment ■■ Retention Management Human Capital Review ■ Executive and Key Talent Review ■ Leadership Continuity Planning ■ Organizational Capability Assessment Key Questions Addressed SVP HR, BU President/ COO EVP, HR SVP, TM OC Business Priorities Talent Management Organizational Capability
  • 48. 39 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Rating Organizational Capability Focus Area Exceptional Full Contributing Inhibiting Organization Design/Organizational Structure Design: Leadership structured to provide/execute decision making at right level. Resources organized effectively and efficiently; span of control provides desired results. Virtual teams, task forces utilized to appropriate degree and enable cross-functional work to be successfully performed. Organization effectively responds to external challenges and work requests in a timely manner with appropriate quality/value. All key positions and reporting relationships exist to accomplish work from strategy to execution/ evaluation. Organization Design/Process Design: Right results are achieved at right time. Accountability is consistently clear, and high quality decisions are consistently made on time. Intended outcomes/outputs achieved within desired/required time frame and budget. Common approach is used to perform core, repetitive work. Work flows effectively, the number of hand-offs is as minimal as possible. Organization Design/Job Design: Senior positions designed with clear roles/responsibilities. Jobs are appropriate to senior talent sufficient autonomy; necessary interdependence without overlap). Positions are appropriately sized to be realistic. Jobs are designed to include career development/progression/ broadening. Job design promotes retention. Measurement criteria exists and utilized to judge performance results. Business/Culture Alignment: Strategy, leadership impact, decision making style, communications are aligned to foster/sustain the overall Marriott International culture and unique subculture/climate necessary to a specific unit to achieve business goals and work priorities. Senior leadership behavior congruent with desired values/culture. Results are appropriately balanced with how results are accomplished. Distinct approaches/environment exists to achieve/sustain a competitive advantage. Ability to respond to adverse situations quickly/ effectively while maintaining values. Performance Management System and Measurement Frameworks: Interactive and systematic ways are used to assess impact the leadership team has on core objectives, and key operating results achieved by the organization, groups and teams. Evaluation criteria includes “return on investment” (benefit gained against invested resources, etc.); “leading” and “lagging” indicators are in use. Goals (what is to be achieved) and boundaries (what is to be avoided) are clearly delineated. Change and Learning Management: Ability of leadership to effectively, quickly and easily introduce and manage [major] change; necessary changes implemented and adopted by associates as intended. Change is sustained. Infrastructure for learning and knowledge transfer in place; benefits from learning and experience are institutionalized and internalized throughout organization. Consistent rewards/recognition for re-using/ enhancing as opposed to creating new. A DETAILED LOOK AT THE ORGANIZATION Organizational Capability Review (OCR) Tool Targeted questions help focus managers’ attention on key organizational design and talent utilization questions. Additional questions encourage managers to think broadly about the overall talent environment. Rating Criteria Exceptional—Strong facilitator of goals; source of competitive advantage Full—Strong performance but enhancement possible Contributing—Adequate performance but enhancement necessary Inhibiting—Performance below expectations; major realignment needed
  • 49. 40 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN OCR Standard and Investigating Questions Areas of Talent Misalignment Identified Opportunities Jobs are designed to include career development/ progression/broadening ■■ Are there multiple feeder positions for each job? ■■ Is there any job that is so customized that a single successor is not possible? Role change and customization has led to gaps in the development ladder Identify and validate career pipelines for this and related positions Job design promotes retention ■■ Are there positions which have historically high turnover? ■■ Does analysis of the job turnover point to an organizational rather than individual cause? Growth in role complexity has resulted in some “impossible” jobs Identify and restructure problematic roles Leadership structured to provide/execute decision making at the right level ■■ Are individual executives frustrated with their levels of autonomy? ■■ Are high-risk decisions being made with appropriate oversight? Static role definitions leave approval authority too centralized Redistribute executive responsibilities to provide appropriate authority and development “stretch” Jobs are appropriate to senior talent ■■ Are the skills of executives being fully leveraged in their current positions? ■■ Are some executives holding responsibilities that others could do better in or develop more from? Jobs are not sufficiently customized to fully leverage individual skill sets Consider areas where job responsibilities could be shifted to fully leverage available talent UNCOVERING OPPORTUNITIES FOR IMPROVEMENT
  • 50. 41 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN 1 Proactively Assess Talent and Organizational Capability Business unit head and SVP of HR discuss talent and organizational implications of new business priorities or strategy shift. 2 Identify Key Performance Levers LTDI and OCR used to surface opportunities for improvement. 3 Recommend and Select Intervention Option Business unit leaders work with OC specialist to develop and select options for intervention. 4 Design, Develop, and Implement Change OC specialist partners with business unit head and senior HR generalist to carry out change. 5 Evaluate Results The team assesses the implementation and establishes metrics to ensure sustained realization of benefits. HR Center of Expertise for Talent Management and Organizational Capability, Organizational Capability Department ■■ Staff with expertise in organizational design, change management, and performance management systems. ■■ Led by a VP of Organizational Capability who reports to the SVP of Talent Management and Organizational Capability. ■■ Consult with business units to increase organizational effectiveness. Recent Organizational Capability Engagements ■■ Merging departments (e.g., currently integrating a large corporate division and a lodging division into a single organization) ■■ Building cross-organizational business processes (e.g., end-to- end work flow of the hotel development process) ■■ Creating new departments ■■ Re-allocating job accountabilities TURNING THE SHIP (ON A DIME) Hypothetical Example of an Organizational Capability (OC) Engagement
  • 51. 42 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Succession Risks Imperatives for All Organizations MANAGING SUCCESSION RISKS: A FOUR-PART ACTION PLAN Portfolio RiskTransition RiskReadiness RiskVacancy Risk Imperative #4: Maximize Strategic Talent Leverage Imperative #3: Overcome New Hire Derailment Imperative #2: Accelerate Full Business Exposure Imperative #1: Safeguard Critical Business Capabilities
  • 52. 43 From CLC HUMAN RESOURCES www.clc.executiveboard.com © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN Succession Planning Reactive Process Management of Individual Departure Events HIGH-IMPACT SUCCESSION MANAGEMENT Vacancy Risk Readiness Risk Transition Risk Portfolio Risk I Safeguarding Critical Business Capabilities 2 Accelerating Full Business Exposure 3 Overcoming New Hire Derailment 4 Maximizing Strategic Talent Leverage Translating Business Strategy into Talent Strategy Executive Talent Growth Review Providing Needed Development Experiences Experience-Based Succession Management Defining Needed Behavior Changes Executive Transition Management Organizing for High-Impact Talent Utilization Strategic Human Capital Review Planning for Key Departures Needs-Based Succession Planning Balancing Short-Term Business Risk with Long- Term Development Benefit Non-Obvious Development Moves Onboarding for Organizational Fit New Executive Career Launch Strategic Executive Talent Management Proactive Strategic Management of Talent Portfolio in Support of Business Goals
  • 53. CLC HUMAN RESOURCES™ CORPORATE LEADERSHIP COUNCIL CORPORATE EXECUTIVE BOARD © 2011 The Corporate Executive Board Company. All Rights Reserved. CLC0232011SYN